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inflation target. In contrast, I show that the standard New Keynesian monetary model predicts that nominal interest rates should …
Persistent link: https://www.econbiz.de/10012772496
Is inflation persistence in the new EU Member States (NMS) comparable to that in the euro area countries? We argue that … show that due to frequent breaks in inflation time series in the NMS, parametric statistical measures assuming a constant …-varying mean leads to the reversal of this result and suggests similar or lower inflation persistence for the NMS compared to euro …
Persistent link: https://www.econbiz.de/10012767014
complementarities in price setting delivers a strictly positive optimal inflation in steady state, differently from standard New … inflation curbs the markups, especially those of the more productive firms, hence attenuating the inefficient dispersion of … markups. At low levels of inflation, the gains from the reduction in misallocation outweigh the cost of inflation …
Persistent link: https://www.econbiz.de/10014264783
. Our analysis improves upon existing work by endogenising the volatility of both output and inflation. Improved …
Persistent link: https://www.econbiz.de/10013316318
We analyse the adjustment of retail and services prices in a period of low inflation, using a set of individual price …
Persistent link: https://www.econbiz.de/10012778429
The reaction of hours worked to technology shocks represents a key controversy between RBC and New Keynesian explanations of the business cycle. It sparked a large empirical literature with contrasting results. We demonstrate that, with a more general and data coherent supply and production...
Persistent link: https://www.econbiz.de/10013135284
While consumption habits have been utilised as a means of generating a hump shaped output response to monetary policy shocks in sticky-price New Keynesian economies, there is relatively little analysis of the impact of habits (particularly, external habits) on optimal policy. In this paper we...
Persistent link: https://www.econbiz.de/10013116941
This paper compares the Calvo model with a Taylor contracting model in the context of the Smets-Wouters (2003) Dynamic Stochastic General Equilibrium (DSGE) model. In the Taylor price setting model, we introduce firm-specific production factors and discuss how this assumption can help to reduce...
Persistent link: https://www.econbiz.de/10013317568
We study the aggregate implications of sectoral shocks in a multi-sector New Keynesian model featuring sectoral heterogeneity in price stickiness, sector size, and input-output linkages. We calibrate a 341 sector version of the model to the United States. Both theoretically and empirically,...
Persistent link: https://www.econbiz.de/10012945756
the quasi- difference of inflation is used in the loss function, as in the hybrid new Keynesian model. Overall, the …
Persistent link: https://www.econbiz.de/10012775989